Google came to a $170 million settlement with US regulators over allegations that YouTube collected the data of children under the age of 13 without their parents' consent, violating COPPA privacy laws.

The $170 million figure looks like a pitiful number, especially when compared to the billions Google has been fined by European regulators, but experts argue it's a significant step forward.

Dylan Collins, CEO of privacy-focused kids' firm SuperAwesome, said the settlement finally shows US regulators and Silicon Valley are addressing a major issue — that most of their services were designed for adults and can't just be tweaked for kids.

Collins predicts that the internet will split in two, with Silicon Valley needing to build out an entirely new internet infrastructure that has kids in mind rather than simply filtering their existing services.

The fine is just a fraction of the vast figures that European regulators have fined Google. Over the last few years, Europe has fined Google $9.3 billion for various antitrust violations — although Google is appealing those fines. Google previously paid the FTC $22.5 million in 2012 for its use of cookies on Apple's Safari browser.

Tiny though those settlements are, critics say it's a significant marker that both US regulators and major tech firms are finally taking kids' privacy online seriously.

Dylan Collins, chief executive of privacy-focused kids' technology platform SuperAwesome, told Business Insider: "You could argue about the size of the fine, but finally Silicon Valley is acknowledging that there are children on general audience platforms and they'll do something about it."

Citing PwC data, Collins said that children represented 40% of new internet users globally last year. "Yet it's only in 2019 that Silicon Valley is acknowledging that yes, maybe children are out there. Ultimately the announcement reflects how the average user profile of the internet has radically changed."

Collins added that Google deserved some credit for investing in the creation of a separate kids' version of YouTube.

The YouTube Kids site, which shows content more appropriate to a younger audience.YouTube Kids

The YouTube Kids app launched in 2015, partly as a response to worries about ad targeting and underage users accessing inappropriate content through the main YouTube service. The YouTube Kids site launched last month. Google says these do feature ads, but advertisers are not allowed to target by interest nor can they track users.

Collins said: "For all the criticism YouTube has come under in terms of ignoring kids, they have probably put, outside of us, more investment into kid-tech with the YouTube Kids app than anyone else. Hopefully YouTube Kids is a reflection of more resources allocated."

He predicted that, within the next five year, major US tech firms would completely rebuild their infrastructure to create a kind of walled-off, kid-friendly internet that mimics the depth and sophistication of the current internet.

"We're in this transition between the underlying delivery technology of the internet just being designed for adults to, about five years for now, where it will have two modes of operation, one for adults and one for kids — all seamless and behind the scenes. The transition point is YouTube rolling out YT Kids."

SuperAwesome is working on its own solution, KidSwitch, which signals that an online user may be younger than 13. SuperAwesome says it looks at the way a user interacts with a site or app through gestures, typing, and the way they look at content to detect whether they're likely to be a younger user. The firm says it's trialing this tech with partners and says it's an alternative to "age-gating", a loose measure used by Snapchat, Instagram, YouTube and other services to prevent under-13s from signing up. That system is reasonably easily spoofed.

Collins added: "The long-term view is you've got to keep the same richness of experience for kids in a kids' version. Otherwise, they'll... use the regular adult version."

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